REPORT TO CITY COUNCIL
SUBJECT
Title
Public Hearing: Approval of the 2025-2026 Consolidated Annual Performance and Evaluation Report (CAPER) for Submission to the U.S. Department of Housing and Urban Development (HUD)
Report
BACKGROUND
The City of Santa Clara receives entitlement funds from the United States Department of Housing and Urban Development (HUD) through HUD’s Community Development Program. The funds allocated to the City are Community Development Block Grant (CDBG) and Home Investment Partnerships (HOME) funds. These funds are provided for programs and activities that benefit low- income persons and households living in the City. The City develops a five-year strategic plan called a Consolidated Plan, which identifies housing and community needs of low-income persons within the City, identifies and prioritizes resources to address those needs, and establishes annual goals and objectives to measure performance. The 2025-2030 Consolidated Plan was approved by the City Council on May 13, 2025.
During each year of the five-year Consolidated Plan cycle, the City prepares an Annual Action Plan. The Annual Action Plan provides a summary of the projects, activities, and the specific federal and non-federal resources that will be allocated to address the priority needs and specific goals identified in the Consolidated Plan. The 2025-2026 Annual Action Plan was approved by the City Council on May 13, 2025.
At the end of each program year, the City reports its progress and accomplishments to HUD. This year-end report is called the Consolidated Annual Performance and Evaluation Report (CAPER). This 2025 CAPER reports on the 2025-2026 Program Year; the first year of the 2025-2030 Consolidated Plan cycle.
DISCUSSION
The 2025 CAPER, following a format established by HUD, summarizes the City's HUD program accomplishments during the program year, the number of beneficiaries, and the resources used to complete the specified activities and projects.
This program year was challenging due to new Federal Grant Conditions and Executive Orders implemented in 2025 that created new legal risk for CDBG, HOME, and HOME ARP funding recipients. Implementation of most activities and projects identified in the Annual Action Plan was delayed while the City joined a lawsuit with other state and local governments seeking injunctive relief. The Court issued a Preliminary Injunction in April 2026. Because the litigation's status was uncertain, the City did not sign the 2025/2026 Federal Grant Agreements until after the Court issued the Preliminary Injunction. As a result, there was insufficient time remaining in the program year for the City to execute funding agreements with public service agencies.
As a recent update, HUD has informed the city that we are in compliance with the recent work plan. Staff has worked hard to complete several capital projects over the last two years even with challenges related to federal policy changes that required us to freeze spending temporarily. We will continue to monitor our CDBG ratio quarterly as part of our long-term efforts.
HUD’s rules require that CDBG public service dollars be used in the year they are allocated, and if they are not, they must be used for capital projects in subsequent years. Thus, the CDBG funds that were allocated for public service projects in FY 2025-2026, will be allocated as “prior-year resources” to capital projects in the next Annual Action Plan. Note: As reflected below, unlike CDBG funds, unspent HOME funds can still be used for program operations funding, and were so used when available and appropriate.
Despite these policy challenges, major accomplishments in the Program Year 2025-2026 include, but are not limited to, the projects highlighted below. A more detailed goals and outcomes summary is provided in Attachment 1.
Tenant Based Rental Assistance (TBRA). Prior year TBRA funds were used to continue providing rental and deposit assistance to homeless households or those at risk of becoming homeless with incomes at or below 60% of the Area Median Income (AMI). A total of 18 households were assisted, comprising 22 adults and 27 children. Case management services were also provided and funded through City special revenue funds. Funds spent: $449,849.11 (HOME), $139,946.89 (City Affordable Housing Funds) and $157,385.56 (City Housing Successor Funds), totaling $747,181.56.
Public Services & Homelessness Services. HOME ARP funds continued to fund Next Door Solutions to Domestic Violence for half the program year. The agency assisted 61 households with services. Other public services were funded with local funds such as mobile shower and laundry services provided by WeHOPE, Catholic Charities Ombudsman program, United Way 211, and Landlord/Tenant Mediation program administered by Project Sentinel.
Affordable Housing Capital Improvement Projects. Two affordable housing capital projects were under construction during the program year: Liberty Tower Elevator project and Riverwood Place Electrical Upgrades. The Riverwood project completed providing conversion from gas to electric for 70 affordable units. The Liberty Tower project has completed construction and is in the final payment process. These projects will be reflected in next year’s CAPER once they fully close out.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
There is no cost to the City other than administrative staff time and expense to produce the 2025-2026 CAPER.
COORDINATION
This report has been coordinated with the Finance Department and City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
A public notice announcing the availability of the CAPER for review and the start of the 15-day public review period was published in the Santa Clara Weekly on August 26, 2026. The public review period runs from August 26 - September 15, 2026, and provides the public with the opportunity to review and comment on the CAPER prior to HUD submission. Comments received during the public review period will be incorporated into the final version of the CAPER.
RECOMMENDATION
Recommendation
1. Approve the 2025-2026 Consolidated Annual Performance and Evaluation Report (Attachment 1) and authorize the City Manager, or his designee, to update the report to incorporate public comments and to capture any missing spending numbers and align the report with the final numbers from HUD’s Integrated Disbursements and Information System once a final FY 2025-2026 funding draw is completed in mid-September; and
2. Authorize the City Manager, or his designee to execute the updated CAPER and related documents for submission to the U.S. Department of Housing and Urban Development (HUD) by September 28, 2026, unless otherwise directed by HUD.
Staff
Reviewed by: Afshan Hamid, Director of Community Development
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. 2025-2026 Consolidated Annual Performance Evaluation Report (CAPER)